Archive for November, 2009

Frustrated with rejections on a daily basis, salespersons have been seeking out alternatives for years to cold calling for generating leads. In former times, the search used to be from field sales people who were given a territory from which they had to generate leads and close orders. In more recent times (say, after 2005 or so), most Information Technology companies have established a separate Inside Sales team often located offshore that is responsible for lead generation, so telemarketers and telesales professionals have now joined this quest.

Is cold calling required or not?

There’s a simple way to look at this: Twenty years ago, there was the PC/XT. Today, there’s no PC/XT. Twenty years ago, hard disks used to max out at 40MB. Today, even the tiniest of pen drives boasts of 256MB. Twenty years ago, there was MSDOS. Today, there’s no MSDOS.

However, cold calling was there twenty years ago and, judging by frequent questions about how to improve its efficiency, it’s evident that cold calling exists today.

In an industry where 20 years is more than a lifetime, cold calling is one of the few things that has survived. If that alone is not enough to establish its value, read on.

If your company invented the most powerful search engine (e.g. Google) or launched the first online auction (e.g. eBay) or set up an online store when Internet Explorer wasn’t even around (e.g. Amazon), it’s all fine to sit back, relax, lay out the benefits of doing business with you and wait to be found by customers – although I’m not sure if Google, eBay and Amazon didn’t pitch their respective outfits to their respective networks, at least during their formative years. Besides, if every individual is your potential customer – like in the case of Google, eBay and Amazon, how do you do cold calling without busting the bank?

However, if you are in the B2B technology business with relatively large ticket sizes (>$100K per deal) and narrowly defined target markets (enterprises and small businesses only, no individuals), a more aggressive outreach into your target market is vital. In fact, some of the global technology leaders we’ve worked with practice outbound marketing even though more than 75% of their revenues come from existing customers. After all, there’s the other 25%. Unless they make the effort to spread awareness about what they’re selling via high-touch one-on-one interactions with companies in their target markets, how’d their prospects know about their offerings and appreciate that they’re superior to those of literally hundreds of their competitors’? In a crowded market, how does an offshore IT services company expect its prospects to see the benefit of outsourcing their IT to their company when scores of their competitors have eliminated cost arbitrage as a differentiator?

Maybe you agree that cold calling is indispensable.

While it may come as a surprise to most of you, most star IT salespersons devote a portion of their day – every day – to do cold calling. As we’ll point out later, cold calling calls for some special skills which very few people have and rewards those elite group of people with learning that can’t be acquired in any other job – not to mention insulating them from day-to-day tensions and anxieties endemic in many other functions of an organization.

The irony is, the very reasons why your company needs cold calling are also the ones that makes it highly frustrating for a cold caller as a person. That brings us to the real issue of what you’re cold calling for, and how you’re going about doing it.

In Part-2 of this post due on December 1, we’ll discuss ways to do cold calling better and achieve manifold increase in opportunity pipelines.

I only recently upgraded to WordPress 2.8.4. I admit that I’d significantly delayed this upgrade, but the problems I’d faced and resolved during this upgrade are still fresh in my mind. Since it’s a bit too soon to undergo a repeat of that ordeal, I’ve been taking the latest summons from WordPress a bit lightly.

Then, suddenly it struck me that, I use WordPress off the cloud since there’s no copy of the software anywhere in my premise, so why should I be bothered about upgrades at all? After all, isn’t cloud computing supposed to take care of of administration, updates, upgrades and all such things, thus freeing the user from all forms of onerous IT tasks?

I guess the answer lies in where your software is installed – ‘your cloud’, ‘my cloud’ or ‘cloud-cloud’ wherever that might be. Talk of Many Things is deployed on the space (cloud?) provided by a third-party hosting provider and not on WordPress.com, so it presumably falls into the ‘my cloud’ category and I’m far from being relieved of admin tasks. Sigh!

Now, if there’re various clouds, the natural question is, who is responsible for ensuring interoperability between them?

Although we have the assurance of Mr. Sundar Pichai, Vice President, Product Management, Google during a recent Economic Times interview that clouds have “lot more possibility for interoperability” since they are built on open standards, I’ve this growing suspicion that we’re going to be hearing a lot more about this subject in the coming months and years and the dreadful – though resigned – feeling that we haven’t seen the last of WordPress’s summons to upgrade versions.

The new Cry Translatoris an innovative, easy-to-use iPhone app that’s able to quickly identify the five distinct cries made by infants – hungry, sleepy, annoyed, stressed and bored – thus aiming to help parents/caregivers soothe the baby. It claims that these five cries are universal to all babies regardless of culture or language.

In a recent post, I’d covered Midomi – an iPhone and PC application that recognizes live music sung or hummed by human beings.

Like me, I’m sure many of you out there might be charged by friends and family members of mutilating music whenever you attempt to sing or hum something. Like I’d suggested earlier, you can use Midomi to silence your critics in case it correctly recognizes your songs. However, if Midomi fails, watch out: your critics might force you to repeat your performance in front of Cry Translator and take whatever remedial action it recommends after 10 seconds!

A couple of weeks ago, I’d written about why, contrary to popular opinion, per second billing tariff plans do not portend financial ruin for mobile network operators (Click here and here).

In the last few days, several MNOs have announced per second billing plans and we’ve started seeing the results. The media is gradually dropping its former scare mongering tone about the negative impact of per second billing on the revenues of MNOs. In fact, there’s now growing realization that there’s more to per second billing than meets the eye, even to the extent of admitting that it’s not exactly manna from heaven for subscribers as it was portrayed a couple of weeks ago.

In its recent article ‘Per second’ billing: Devil lies in the detail, the Economic Times takes the case of one Mr. Sahil Shah who was using a 30 paise per minute plan. Presumably caught up in the media frenzy over how per second billing would lead to lower costs – untrue as my previous blog posts have shown – he shifted to a per second plan. Had his MNO exactly prorated its per minute plan, Mr. Shah would’ve been able to sign up for a new plan costing 0.5 paisa per second. Apparently that didn’t happen since, according to the article, Mr. Shah’s new plan carried a charge of 1 paisa per second plan, which is twice as expensive compared to his older 30 paise per minute plan. Now, when I say that Mr. Shah’s average call duration was three minutes, those of you who’ve seen the charts in my previous posts will figure out the ending of this story immediately: poor Mr. Shah got a rude shock when he found himself exhausting his fortnight’s talktime in just a week because his average call that used to cost him 3 x 30 = 90 paise under his old per minute plan now cost him twice as much (180 x 1 = 180 paise) with his new per second billing plan.

By recasting the chart from my previous post using the 30 paise per minute plan as the new baseline, it becomes evident that per second billing results in higher charges for call durations exceeding 30 seconds.

The ET article confirms what readers of my previous posts already know and others can see from the above chart – call charges depend upon individual usage patterns and the manner in which tariff plans are structured. Mr. Sahil Shah’s experience signals the need for subscribers to carefully evaluate whether a per second billing plan really suits their own calling behavior instead of signing up to them in a frenzy and regretting their decison later. This Excel-based calculator can help them do this.

Many Americans might find it increasingly difficult to get, and hold on to, credit cards in the wake of the recently passed The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009. To attract such people to becoming their customers as also to avoid losing those of them who are their existing customers, online merchants and web-based businesses are exploring alternative payment methods that bypass credit card networks and operate using ACH, TELCO or private EFT networks. Paypal, eBillMe, Mazooma, Bill Me Later, Bokuand Zong and a raft of other APMs have further stoked the interest of merchants with promises of lowering processing costs, increasing ticket sizes, boosting conversion rates and reducing fraud.

Merchants wanting to learn more about alternative payment methods might find the singular focus of traditional comparison shopping sites like CreditorWeb and modern realtime auction providers such TransFS on credit card processing services too limiting. Payments R Us is their Man Friday.

Payments R Us bills itself as “Your Gateway to Online Payment Solutions” and offers guidance and advice on choosing merchant account providers. According to its website, “We allow you to compare vendors and pricing. Our service is free, confidential and objective.” Payments R Us also provides a host of information on payment processing, merchant accounts and pricing plans.

How does Payments R Us work?

Merchants first submit a few details about their payments volume and type.

They then describe the nature items they sell, method of connectivity to their payment processor, need for fraud detection and prevention function, and a few other aspects of their business.

Then the Payments R Us Suggester presents a list of payments processors that it has determined to demonstrate the closest match for the merchant’s requirements.

Unlike MoneyAisle or TransFS, Payments R Us doesn’t seem to be executing a live auction to get the best rates from the participating vendors. In fact, contrary to its claims that it allows merchants to compare pricing, I couldn’t find any pricing information in its final report. Of course, pricing is not everything in a fairly mission critical function like payments processing. Since most merchants would want to evaluate quality, service and other critical attributes of a payments processor rather than immediately sign up with the cheapest one, the absence of pricing information at the initial stage is hardly a serious shortcoming. To evaluate various alternatives and engage in negotiations before selecting the best APM, merchants can use Payments R Us’ offer to establish a direct connection with the shortlisted vendors.

Payments R Us is the first comparison engine I’ve come across for alternative payment methods. In case readers know of any others, I request them to provide more details by posting comments below this post.

Protection money, the latest While You Were Out column, is yet another Stanley Bing masterpiece that explains why I open the FORTUNE magazine from its last page – Bing’s permanent abode. In this article, Bing – who cheekily clarifies that he has no connection with Microsoft’s latest search engine – blends form and content that are diametrically opposed to each other to weigh in on overdraft protection, which is the current hot topic in the US banking industry.

The uninitiated might wonder why there’s such a heated debate around this topic if they read Bing’s definition of overdraft protection: “No matter what you spend with your debit card, even if you have no money in your account, the guys at the bank will make sure that you’re not embarrassed. They’ll pay your tab!”. Whereas people who’re tuned in to this debate know that banks are doing this not as a magnanimous gesture but in return for the 25-35 dollars they charge each time their customers overdraw their checking accounts.

Interestingly, you can portray banks as saviors or villains depending upon how the concept of overdraft protection is projected. By not declining your telephone bill payment transaction when your account didn’t have enough money to cover your bill, your bank makes sure that you’re not slapped costly penalties and reinstatement charges by your telephone company. By charging only $35 in ovedraft protection fee for this favor, your bank does appear to be your savior. But, as in the oft-cited example, when your bank charges you $35 in fee when your $4 coffee busted your bank balance, it comes across as a villain.

Let me add a few more angles to this issue and leave it to you to decide whether ovedraft protection is an example of “genuine protection”, a case of “protection money” or a cry for “over with protection”.

Saviors or villains, there’s increasing realization that banks cannot extend overdraft protection for free. British banks made this clear during a similar furore in the UK around two years ago. American banks are following suit now. So, the crux of the current debate is really about how much they can charge for it and at what point they should inform their customers about it.

The consumer rights protection camp in the US is insisting that banks must extend overdraft protection only when customers request for it explicitly and then, do so at cost. In other words, they want banks to stop enrolling customers for overdraft protection programs by default and making them into a source of profits.

If banks are coerced – by consumers, regulators, or both – to price overdraft protection fee at cost, we can expect a renewed debate over the true cost. While the most obvious component of the cost is related to additional staffing required to handle overdraft, there could be other hidden costs viz. risk premium. When a bank approves an overdraft, it’s taking a credit risk and might insist that its risk premium cost is included in determining the overall cost of providing overdraft protection.

In large systems integration projects, it is customary for the buyer to award the entire contract to a systems integrator who manages all other companies required to fulfill the different pieces of the project. In such an engagement model, the buyer has “one throat to choke”, and companies who could normally be rivals land up in bed together as partners for the specific project. The following example illustrates this model.

When a Top-5 bank wanted to launch the latest Faster Payments product in the United Kingdom, it spotted a couple of state-of-the-art products that could deliver the new messaging formats, high volume handling ability and many of the core needs of the Faster Payments Service. To make the necessary modifications and enhancements to these standard products to fit its specific requirements and to ensure that they landed safely into its existing system landscape, the bank appointed a systems integrator. The bank also realized that its old and creaking payments infrastructure had to undergo modernization in lockstep with the introduction of new products in order to deliver a complex and high volume, realtime payments system like FPS. Its total IT outsourcing partner was the natural choice to modify its legacy systems, integrate and test the end to end solution and fulfill other program management functions. This led to the formation of a consortium comprising of five companies: Company A did program management, Company B was the systems integrator, Companies C, D and E were chosen as suppliers of the new products. It was no secret that many of these companies were competitors to one another in the general market. To ensure that their competitive instincts did not adversely impact the success of the project, the bank put in place a comprehensive governance framework that fostered a professional and harmonious project atmosphere by clearly specifying their individual roles and responsibilities within the context of the specific project.

Now, all this is fine in case of large projects where no single company has total control over the required technology components. However, when you come across an industry leader like Western Union inviting banks into the remittance processing market which is its traditional stronghold, you have to sit up and take notice and wonder what could be the motivation for consorting with the enemies as it were. In a recent GTN News interview, Western Union’s Dr. Wolfgang Fenkart-Fröschl is openly encouraging banks to enter the remittance business even though it’s well known that Western Union’s charges are higher than those of Citi, Wells Fargo, Bank of America and ICICI who are among a handful of banks who have been fairly active in the remittance business in past year or so.

For the uninitiated, Western Union, a Denver, Colorado based company is the largest remittance service provider in the world commanding close to 80% of the market for transferring around 430 billion dollars in 2008 from migrants working in USA, UK, Germany, Middle East and other countries to their families back home in India, China, the Philippines and Latin America, to name a few leading receiving nations.

Western Union has traditionally concentrated on the so-called Cash-to-Cash model in which remitters hand over cash at the sending country and beneficiaries collect cash at the receiving country. Other models include Account-to-Cash in which senders fund their transfers from their checking accounts and receivers collect cash at the destination; and Account-to-Account where no cash changes hands on either sender or receiver’s leg of the remittance transaction. Since Western Union is not a bank, it cannot offer checking accounts, which means it cannot drive the account-based remittance models by itself.

Ever since remittances began, cash-to-cash has been the dominant remittance model (enjoying greater than 80% share of volumes) and Western Union has been its king. Now, on the surface, Western Union’s latest overture to banks encouraging them to enter the remittance market could be seen as an attempt to acquire an additional revenue stream if it can persuade banks to use its proven platform on a whitelabeled basis (instead of banks developing their own systems). But, in a typical whitelabeling model, different players only share technology, not customers. Western Union’s pitch suggesting that banks can access its customer base seems to fly in the face of conventional business wisdom. It makes sense only if it expects a massive defection of its existing cash-using customer base to account-based models which are out of bounds for Western Union by virtue of its charter of being a money transfer operator.

Like every publication, Economic Times (India’s largest and the world’s second largest business daily newspaper after The Wall Street Journal) is entitled to its own share of slow news days.

Very few might recall seeing one day’s news item or article repeated in another day’s paper. Even when you come across the same piece on different pages of the same edition, you might shrug it off as a slow news day for ET.

But, when I recently found the same item being repeated twice on the same page, I couldn’t help feeling that Ecotimes is having one too many slow news days lately!